What overnight stay expenses can you claim?

You can claim a deduction for travel expenses for travelling to your rental property if:

  • you own a rental property that is far away from where you live
  • it would be unreasonable to expect you not to stay near the rental property overnight when making an inspection
  • your main purpose in travelling was to inspect and maintain the rental property.

Where you stay overnight, you can claim meals and accommodation.

Where your trip is mainly for private purposes (for example, having a holiday) and inspecting the property is incidental to that main purpose, you cannot claim the costs of getting there or the return trip. You can only claim local expenses directly related to the property inspection such as taxi fares to the rental property and a proportion of accommodation expenses.

Example: apportionment

Bill and Marli King are joint owners of a rental property in a resort town on the north coast of Queensland. They spend $1,800 on airfares and $1,500 on accommodation when they travel from their home in Melbourne, mainly for the purpose of holidaying in the resort town, but also to inspect the property. They also spend $100 on taxi fares from the hotel to the rental property and back. The Kings spent:

  • one day (10% of their total time in Queensland) on matters relating to the rental property
  • nine days (90% of their total time in Queensland) swimming and sightseeing.

They cannot claim a deduction for any part of the $1,800 airfares because the main purpose of the trip is a holiday and the property inspection is incidental.

If the trip included a significant amount of time devoted to the rental property, they could apportion some of the airfares.

They can claim deductions for the $100 taxi fare and a reasonable apportionment of the accommodation expenses (that is $150 of the $1,500).

Their total claim is $250.

As the Kings jointly own the rental property, they can claim $125 each.

Example: accommodation

Jabari is the sole owner of a rental property on the Gold Coast. He travels from Sydney to the Gold Coast to undertake deductible repairs on his rental property but takes his spouse, Kym, with him for company and to share the driving. Jabari and Kym stay in a hotel where the cost of a:

  • single room is $55
  • double room is $70.

A reasonable basis for apportionment of accommodation expenses in this instance is to claim the single room rate of $55 (rather than half the double room rate), as Jabari would have stayed in the single room if Kym had not travelled with him.

End of example
    Last modified: 05 Jul 2016QC 22093